Funding for fintech startups poised to hit a record in 2017
(Bloomberg) --Financial technology startups are on pace to see funding reach a record as insurance, wealth management, lending and blockchain-related companies attract new dollars.
So far this year there have been 496 deals globally, raising a total of $8 billion, according to a new report from CB Insights, a technology industry research firm. That’s just $6.1 billion shy of the annual record set in 2015, shortly after companies like LendingClub Corp. and On Deck Capital Inc. went public. In the second quarter of this year alone, more than $5 billion was raised, the report showed.
Even as some startups in other sectors of the private market have faced scandals (Uber Technologies Inc.) or had initial public offerings that flopped (Blue Apron Holdings Inc, Snap Inc. ), some recent financing rounds in fintech were large enough to mint new unicorns. In the past three months, five new startups with valuations over $1 billion were born: Clover Health, Robinhood Financial LLC, Avidxchange Inc., Symphony and Tuandaiwang, according to CB Insights.
Venture Capital firms including 500 Startups and New Enterprise Associates have been the most active in the past five quarters, but funding wouldn’t be hitting records without the help of corporate investors. In fact, corporate participation hit a five-quarter high for fintech in the second quarter, with these firms participating in more than 30% of deals globally.
Some of the sectors seeing the biggest share of dollars were blockchain and bitcoin startups, which saw funding grow 100% on a quarterly basis, while bitcoin and other crypto currencies continue to generate new headlines with volatile price movements. Other winners were insurance and wealth management related startups, which each saw funding rise by more than 200%.